Anticipating a huge spike in the demand for work due to severe drought conditions in most parts of the country, the Ministry of Rural Development (MoRD) has decided to release 55 per cent of its annual MGNREGA budgetary allocation of Rs 38,500 crore by June this year.
Ministry officials said that the decision to exhaust much of its funds over the next few months has been taken since the drought will lead to a severe drop in farm employment in the country.
“We will release over Rs 21,000 crore by early June itself. This being a drought year, a lot of demand is expected to be generated for work under the MGNREGA. We have told the states very categorically that they should not stop providing work under the scheme,” said a senior MoRD official.
Rural Development Minister Birender Singh has written to the chief secretaries of 13 drought-affected states directing them to ensure that over the next few months, until monsoon, no person who comes forward demanding job should be turned away. This year Gujarat, Haryana and Bihar will be added to the existing list of ten drought-affected states that include Maharashtra, Telangana, Karnataka, Andhra Pradesh, Odisha, Madhya Pradesh, Uttar Pradesh, Jharkhand, Chhattisgarh and Rajasthan.
Over the last few months, several states including drought-affected ones such as Madhya Pradesh, Andhra Pradesh, Odisha and Karnataka had repeatedly written to the Central government asking for the release of funds. The inadequate budgetary provision for the scheme by the finance ministry had hit work on the ground with several states not registering demand for work unless they had enough funds at hand. This had led to only 1.8 per cent of the total household employed under MGNREGA in drought-hit regions being provided their full entitlement of 150 days of work in 2015-16, as per available data.
Recently, Singh announced extending the 150 days provision for this financial year, however, there has been no corresponding budgetary increase by the finance ministry yet. Officials said that depending on the utilisation of funds, the ministry will send a proposal to the finance ministry to increase its budgetary allocation for the scheme.
“Everything depends on the monsoon. If the monsoon is good, demand for MGNREGA work will fall suddenly as agriculture will take off. Agriculture wages in many states are much higher than what we provide under MGNREGA,” said the official.
Of the Rs 21,000 crore expected to be released till June, this month the ministry has provided Rs 12,000 crore to the states towards payment of last year’s arrears for labour cost as well as for the month of April. On Monday, it released Rs 6000 for May and the remaining amount will be given in early June to cover the arrears of material costs incurred by contractors in the last financial year.